Polaris North America ORV retail rises in Q3

Reported and adjusted salesfor the third quarter of 2018 increased 12% to $1,651 million and $1,653 million, respectively

Reported net incomewas $1.50 per diluted share, up 17% over the prior year; adjusted net income for the same period was $1.86 per diluted share, up 22% over the prior year

North American retail salesincreased 1% for the quarter compared to a strong 13% increase last year; ORV N.A. retail sales were up low single-digits driven by side-by-side vehicles

Dealer inventorywas up 6% year-over-year for the third quarter 2018, in line with expectations

Polaris maintaining full year 2018 adjusted sales and earnings guidance with full year adjusted sales in the range of 11% to 12% over the prior year andfull year adjusted earningsin the range of $6.48 to $6.58 per diluted share which includes the absorption of an estimated $40 million of tariff cost increases anticipated in 2018 before counter-measures.

Key Financial Data

(in thousands, except per share data)

INCOME STATEMENT - Q3 September 30, 2018

Reported

YOY % Chg.

Adjusted*

YOY % Chg.

Sales

$

1,651,415

12%

$

1,653,130

12%

Net income

$

95,529

17%

$

117,926

21%

Diluted EPS

$

1.50

17%

$

1.86

22%

BALANCE SHEET - Q3 September 30, 2018

Reported

YOY % Chg.

Cash and cash equivalents

$

183,411

39%

Inventories, net

$

1,019,517

21%

Total debt, capital lease obligations and notes payable

$

1,864,327

103%

Shareholders' equity

$

898,252

—

CASH FLOW - YTD September 30, 2018

Reported

YOY % Chg.

Net cash provided by operating activities

$

354,138

(29)%

Purchase of property & equipment

$

157,763

25%

Repurchase and retirement of common shares

$

246,931

178%

Cash dividends to shareholders

$

112,748

4%

Acquisition of businesses

$

729,925

NM

NM = Not meaningful

Note: the results and guidance in this release, including the highlights above, include references to non-GAAP operating measures, which are identified by the word “adjusted” preceding the measure. *A reconciliation of GAAP / non-GAAP measures can be found at the end of this release.

CEO Commentary

“The dedication and strong execution of our Polaris team continued to drive broad based growth across the business in the third quarter. Our model year '19 product news was well received and our improving manufacturing and logistics performance accelerated the successful roll-out of RFM for side-by-sides. International growth again outpaced North America, with Indian market share gains continuing in every market we serve. We were also pleased with the early performance of Boat Holdings, the largest manufacturer of pontoon boats in the U.S. that we welcomed to our growing Powersports portfolio earlier in the quarter. Our commitment to customers and investments in the U.S. remain strong, as we broke ground on a new multi-product PG&A and aftermarket distribution center in Nevada. We are strategically and tactically committed to being a customer-centric, highly efficient growth company, and our investments demonstrate that commitment. Our goals do not eliminate or even diminish the serious challenges we face from tariffs, but they certainly increase our resolve to find acceptable solutions or offsets. We are making too much progress with our supply chain, safety and quality and innovation initiatives to have the benefits wiped out by protracted trade negotiations. The challenge is real, and so are our efforts to overcome them. We remain well-positioned with a world-class team and product line-up and are confident in our ability to deliver strong financial and operational performance in the quarter and years ahead.”

Polaris Industries Inc. today reported third quarter 2018 sales of $1,651 million, up 12 percent from $1,479 million for the third quarter of 2017. Adjusted sales for the third quarter of 2018 were $1,653 million, up 12 percent from the prior year period. The Boat Holdings, LLC ("Boat Holdings") acquisition added $134 million of sales in the third quarter. The Company reported third quarter 2018 net income of $96 million, or $1.50 per diluted share, compared with net income of $82 million, or $1.28 per diluted share, for the 2017 third quarter. Adjusted net income for the quarter ended September 30, 2018 was $118 million, or $1.86 per diluted share, up 21 percent and 22 percent respectfully, compared to $98 million, or $1.52 per diluted share in the 2017 third quarter.

Gross profit increased 10 percent to $401 million for the third quarter of 2018 from $364 million in the third quarter of 2017. Reported gross profit margin was 24.3 percent of sales for the third quarter of 2018 compared to 24.6 percent of sales for the third quarter of 2017. Gross profit for the third quarter of 2018 includes the negative impact of $8 million of Victory Motorcycles®wind-down costs, acquisition-related costs for the acquisition of Boat Holdings and realignment and restructuring costs. Excluding these items, third quarter 2018 adjusted gross profit was $410 million, or 24.8 percent of adjusted sales. For the third quarter of 2017 adjusted gross profit of $378 million, or 25.5 percent of adjusted sales, excludes the negative impact of $14 million in Victory Motorcycles wind down costs and other restructuring and realignment costs. Gross profit margins on an adjusted basis were down slightly primarily due to mix and the impact of tariff, commodity and freight cost pressures during the quarter, partially offset by lower warranty and promotional costs.

Operating expenses increased seven percent for the third quarter of 2018 to $284 million, or 17.2 percent of sales, from $265 million, or 17.9 percent of sales, in the same period in 2017. Operating expenses in dollars increased primarily due to the Boat Holdings acquisition completed during the quarter and investments in strategic projects. Operating expenses as a percentage of sales, improved as the Company realized efficiencies through its selling, marketing and general and administrative spend along with the addition of Boat Holdings which inherently has a lower operating expense to sales ratio.

Income from financial services was $21 million for the third quarter of 2018, up 18 percent compared with $18 million for the third quarter of 2017. The increase is attributable to higher retail demand and penetration rates along with increased income from Polaris Acceptance as dealer inventories were at more appropriate levels to meet demand.

Non-Operating Expenses (Reported)

(in thousands)

Three months ended September 30,

2018

2017

Change

Interest expense

$

19,823

$

8,492

133

%

Equity in loss of other affiliates

$

111

$

1,603

(93

)%

Other expense (income), net

$

(4,124

)

$

(2,368

)

74

%

Provision for income taxes

$

27,530

$

27,293

—

Interest expense was $20 million for the third quarter of 2018 compared to $8 million for the same period last year, primarily due to increased debt levels to finance the Boat Holdings acquisition.

Other expense (income), net, was $4 million and $2 million of income in the third quarter of 2018 and 2017, respectively, resulting from foreign currency exchange rate movements and the corresponding effects on foreign currency transactions related to the Company’s foreign subsidiaries.

The provision for income taxes for the third quarter of 2018 was $28 million, or 22.4 percent of pretax income, compared with $27 million, or 25.0 percent of pretax income for the third quarter of 2017. The decrease in the effective income tax rate is primarily due to the reduction in the federal statutory tax rate to 21 percent as a result of U.S. Tax Reform offset by a decrease in excess tax benefits related to stock based compensation compared to the prior year.

Product Segment Highlights (Reported)

(in thousands)

Sales

Gross Profit

Q3 2018

Q3 2017

Change

Q3 2018

Q3 2017

Change

Off-Road Vehicles / Snowmobiles

$

1,035,554

$

1,007,392

3

%

$

290,631

$

296,904

(2

)%

Motorcycles

$

155,316

$

155,059

—

$

19,577

$

10,354

89

%

Global Adjacent Markets

$

96,251

$

91,575

5

%

$

24,155

$

15,983

51

%

Aftermarket

$

229,973

$

224,700

2

%

$

66,092

$

63,239

5

%

Boats

$

134,321

$

—

$

20,253

$

—

Off-Road Vehicle (“ORV”) and Snowmobile segment sales, including PG&A, totaled $1,036 million for the third quarter of 2018, up three percent over $1,007 million for the third quarter of 2017 driven by growth across most categories. PG&A sales for ORV and Snowmobiles combined increased 12 percent in the 2018 third quarter compared to the third quarter last year. Gross profit decreased two percent to $291 million in the third quarter of 2018, compared to $297 million in the third quarter of 2017.

ORV wholegoodsales for the third quarter of 2018 increased 12 percent primarily driven by strong RANGER and ATV shipments. Polaris North American ORV retail sales increased low-single digits percent for the quarter with side-by-side vehicles up low-single digits percent and ATV vehicles down low-single digits percent. ATVs again gained market share during the quarter. The Company experienced a modest amount of market share loss for side-by-sides due to a very difficult comparable in the third quarter of 2017. The North American ORV industry was up low-single digits percent compared to the third quarter last year.

Snowmobile wholegood sales in the third quarter of 2018 was $69 million compared to $144 million in the third quarter last year. Snowmobile sales are expected to be more heavily weighted towards the fourth quarter of 2018 due to the timing of shipments for the Company's pre-season snowmobile orders.

Motorcyclesegment sales, including PG&A, totaled $155 million, which were flat compared to the third quarter of 2017. Gross profit for the third quarter of 2018 was $20 million compared to $10 million in the third quarter of 2017. Adjusted for the Victory wind-down costs recorded in both the 2018 and 2017 third quarters, motorcycle gross profit was $21 million in the 2018 third quarter compared to $18 million for the 2017 third quarter.

North American consumer retail sales for the Polaris motorcycle segment, including both Indian Motorcycle and Slingshot, decreased high-single digits during the 2018 third quarter. Indian Motorcycle retail sales increased low-single digits, in spite of an overall weak N.A. motorcycle market. Slingshot's retail sales were down during the quarter. Motorcycle industry retail sales, 900cc and above, were down low-teens percent in the 2018 third quarter. Indian Motorcycle gained market share for the 2018 third quarter on a year-over-year basis.

Global Adjacent Marketssegment sales, including PG&A, increased five percent to $96 million in the 2018 third quarter compared to $92 million in the 2017 third quarter. Reported gross profit increased 51 percent to $24 million in the third quarter of 2018, compared to $16 million in the third quarter of 2017. Adjusted gross profit increased nine percent to $24 million in the third quarter of 2018, compared to $22 million in the third quarter of 2017.

Aftermarketsegment sales increased two percent to $230 million in the 2018 third quarter compared to $225 million in the 2017 third quarter driven by the Company's powersports aftermarket brands. TAP sales in the third quarter of 2018 were $189 million, which was down slightly compared to the third quarter of 2017. TAP sales were impacted by delayed accessory development work and weakness in business-to-business sales in the South/Southwest. Gross profit increased to $66 million in the third quarter of 2018, compared to $63 million in the third quarter of 2017.

Boats segment sales, which consist of the Boat Holdings acquisition that closed July 2, 2018, were $134 million in the 2018 third quarter, slightly better than expectations. Reported gross profit was $20 million or 15.1 percent of sales in the third quarter of 2018. Adjusted gross profit, which excludes integration costs and purchase accounting, was $23 million or 17.4 percent of sales in the third quarter of 2018.

Supplemental Data:

Parts, Garments, and Accessories (“PG&A”)sales increased eight percent for the 2018 third quarter primarily driven by growth in ORV.

International sales to customers outside of North America, including PG&A, totaled $172 million for the third quarter of 2018, up 10 percent, from the same period in 2017. Foreign exchange movements reduced sales by three percent for the quarter. The increase was driven by strong sales in snowmobiles and motorcycles.

Financial Position and Cash Flow

(in thousands)

Nine Months ended September 30,

2018

2017

Change

Cash and cash equivalents

$

183,411

$

132,260

39

%

Net cash provided by operating activities

$

354,138

$

497,095

(29

)%

Repurchase and retirement of common shares

$

246,931

$

88,877

178

%

Cash dividends to shareholders

$

112,748

$

108,923

4

%

Acquisition of businesses

$

729,925

$

(1,645

)

NM

Total debt, capital lease obligations and notes payable

$

1,864,327

$

919,984

103

%

Debt to Total Capital Ratio

67

%

51

%

NM = Not meaningful

Net cash provided by operating activities was $354 million for the nine months ended September 30, 2018, compared to $497 million for the same period in 2017. The decrease in net cash provided by operating activities for the 2018 period was due to the timing of accrual payments and higher factory inventory needed for ongoing refinement of retail flow management ("RFM"). Total debt at September 30, 2018, including capital lease obligations and notes payable, was $1,864 million. The Company’s debt-to-total capital ratio was 67 percent at September 30, 2018 compared to 51 percent at September 30, 2017. Cash and cash equivalents were $183 million at September 30, 2018, up from $132 million at September 30, 2017.

Share Buyback Activity: During the third quarter of 2018, the Company repurchased 507,000 shares of its common stock for $55 million. Year-to-date through September 30, 2018, the Company has repurchased 2,069,000 shares of its common stock for $247 million. As of September 30, 2018, the Company has authorization from its Board of Directors to repurchase up to an additional 4.4 million shares of Polaris common stock.

2018 Business Outlook

The Company is maintaining its adjusted sales and earnings guidance for the full year 2018. Adjusted sales are expected to increase in the range of 11 percent to 12 percent over 2017 adjusted sales of $5,428 million and adjusted net income is expected to be in the range of $6.48 to $6.58 per diluted share for the full year 2018 compared to adjusted net income of $5.10 per diluted share for 2017. The Company is maintaining its current sales and earnings per share guidance ranges given the fluid nature of tariffs and the potential impact of trade negotiations and a more difficult motorcycle environment, which is impacting growth and profitability for that segment. The full year earnings guidance includes approximately $40 million of tariff cost increases before counter-measures, as the Company understands them today.

Non-GAAP Financial Measures

This press release and our related earnings call contain certain non-GAAP financial measures, consisting of “adjusted” sales, gross profit, income before taxes, net income and net income per diluted share as measures of our operating performance. Management believes these measures may be useful in performing meaningful comparisons of past and present operating results, to understand the performance of its ongoing operations and how management views the business. Reconciliations of adjusted non-GAAP measures to reported GAAP measures are included in the financial schedules contained in this press release. These measures, however, should not be construed as an alternative to any other measure of performance determined in accordance with GAAP.

Investor Conference Call

Third Quarter 2018 Earnings Conference Call and Webcast Presentation

Today at 10:00 AM (CDT) Polaris Industries Inc. will host a conference call and webcast to discuss the 2018 third quarter results released this morning. The call will be hosted by Scott Wine, Chairman and CEO; and Mike Speetzen, Executive Vice President - Finance and CFO. A slide presentation and link to the webcast will be posted on the Polaris Investor Relations website at ir.polaris.com. To listen to the conference call by phone, dial 1-877-883-0383 in the U.S., or 1-412-902-6506 internationally. The Conference ID is 1886245. A replay of the conference call will be available by accessing the same link on our website.

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Data) (Unaudited)

Three months ended September 30,

Nine months ended September 30,

2018

2017

2018

2017

Sales

$

1,651,415

$

1,478,726

$

4,451,420

$

3,997,428

Cost of sales

1,250,145

1,114,764

3,341,493

3,040,589

Gross profit

401,270

363,962

1,109,927

956,839

Operating expenses:

Selling and marketing

128,929

122,642

369,495

355,486

Research and development

64,181

63,129

197,741

175,887

General and administrative

90,639

79,421

262,206

245,998

Total operating expenses

283,749

265,192

829,442

777,371

Income from financial services

21,348

18,138

64,117

57,711

Operating income

138,869

116,908

344,602

237,179

Non-operating expense:

Interest expense

19,823

8,492

37,087

24,438

Equity in loss of other affiliates

111

1,603

25,576

4,839

Other expense (income), net

(4,124

)

(2,368

)

(27,660

)

7,088

Income before income taxes

123,059

109,181

309,599

200,814

Provision for income taxes

27,530

27,293

65,816

59,796

Net income

$

95,529

$

81,888

$

243,783

$

141,018

Net income per share:

Basic

$

1.54

$

1.31

$

3.88

$

2.24

Diluted

$

1.50

$

1.28

$

3.78

$

2.21

Weighted average shares outstanding:

Basic

62,207

62,646

62,894

62,890

Diluted

63,546

63,885

64,550

63,942

CONSOLIDATED BALANCE SHEETS

(In Thousands), (Unaudited)

September 30,

September 30,

2018

2017

Assets

Current Assets:

Cash and cash equivalents

$

183,411

$

132,260

Trade receivables, net

217,694

184,074

Inventories, net

1,019,517

841,922

Prepaid expenses and other

105,066

80,859

Income taxes receivable

5,865

9,535

Total current assets

1,531,553

1,248,650

Property and equipment, net

807,511

735,441

Investment in finance affiliate

88,790

70,910

Deferred tax assets

116,447

191,287

Goodwill and other intangible assets, net

1,515,431

784,616

Other long-term assets

88,299

102,162

Total assets

$

4,148,031

$

3,133,066

Liabilities and Shareholders’ Equity

Current Liabilities:

Current portion of debt, capital lease obligations and notes payable

$

66,595

$

27,835

Accounts payable

436,401

385,858

Accrued expenses:

Compensation

160,033

148,280

Warranties

122,544

112,085

Sales promotions and incentives

187,307

192,568

Dealer holdback

124,259

117,934

Other

179,738

183,030

Income taxes payable

8,963

27,448

Total current liabilities

1,285,840

1,195,038

Long term income taxes payable

26,805

22,036

Capital lease obligations

16,712

18,451

Long-term debt

1,781,020

873,698

Deferred tax liabilities

7,054

9,366

Other long-term liabilities

122,728

107,182

Total liabilities

$

3,240,159

$

2,225,771

Deferred compensation

9,620

11,331

Shareholders’ equity:

Total shareholders’ equity

898,252

895,964

Total liabilities and shareholders’ equity

$

4,148,031

$

3,133,066

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands), (Unaudited)

Nine months ended September 30,

2018

2017

Operating Activities:

Net income

$

243,783

$

141,018

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

155,910

138,105

Noncash compensation

43,219

34,249

Noncash income from financial services

(22,232

)

(20,131

)

Deferred income taxes

(4,171

)

(2,703

)

Impairment charges

21,716

25,395

Other, net

(9,618

)

4,839

Changes in operating assets and liabilities:

Trade receivables

(991

)

(447

)

Inventories

(201,229

)

(83,621

)

Accounts payable

90,842

108,198

Accrued expenses

1,620

80,949

Income taxes payable/receivable

28,715

62,336

Prepaid expenses and others, net

6,574

8,908

Net cash provided by operating activities

354,138

497,095

Investing Activities:

Purchase of property and equipment

(157,763

)

(126,647

)

Investment in finance affiliate, net

22,207

43,230

Investment in other affiliates, net

7,366

(7,110

)

Acquisition and disposal of businesses, net of cash acquired

(729,925

)

1,645

Net cash used for investing activities

(858,115

)

(88,882

)

Financing Activities:

Borrowings under debt arrangements / capital lease obligations

2,845,688

1,623,577

Repayments under debt arrangements / capital lease obligations

(1,970,701

)

(1,850,247

)

Repurchase and retirement of common shares

(246,931

)

(88,877

)

Cash dividends to shareholders

(112,748

)

(108,923

)

Proceeds from stock issuances under employee plans

47,158

14,226

Net cash provided by (used for) financing activities

562,466

(410,244

)

Impact of currency exchange rates on cash balances

(5,904

)

9,597

Net increase in cash, cash equivalents and restricted cash

52,585

7,566

Cash, cash equivalents and restricted cash at beginning of period

161,618

145,170

Cash, cash equivalents and restricted cash at end of period

$

214,203

$

152,736

Cash, cash equivalents and restricted cash by category:

Cash and cash equivalents

$

183,411

$

132,260

Other long-term assets

30,792

20,476

Total

$

214,203

$

152,736

NON-GAAP RECONCILIATION OF RESULTS

(In Thousands, Except Per Share Data), (Unaudited)

Three months ended September 30,

Nine months ended September 30,

2018

2017

2018

2017

Sales

$

1,651,415

$

1,478,726

$

4,451,420

$

3,997,428

Victory wind down (1)

1,055

1,560

1,304

507

Restructuring & realignment (3)

660

—

2,789

—

Adjusted sales

1,653,130

1,480,286

4,455,513

3,997,935

Gross profit

401,270

363,962

1,109,927

956,839

Victory wind down (1)

1,239

7,555

417

54,970

Acquisition-related costs (2)

3,130

—

3,130

12,950

Restructuring & realignment (3)

4,128

6,214

15,965

10,517

Adjusted gross profit

409,767

377,731

1,129,439

1,035,276

Income (loss) before taxes

123,059

109,181

309,599

200,814

Victory wind down (1)

1,514

8,809

1,757

77,240

Acquisition-related costs (2)

8,989

3,492

16,798

23,459

Restructuring & realignment (3)

4,671

6,214

22,564

10,517

EPPL impairment (5)

—

—

23,447

—

Brammo (6)

—

—

(13,478

)

—

Intangible amortization (7)

10,403

6,344

22,591

18,772

Other expenses (4)

3,288

—

5,010

—

Adjusted income before taxes

151,924

134,040

388,288

330,802

Net income

95,529

81,888

243,783

141,018

Victory wind down (1)

1,154

5,537

1,339

53,378

Acquisition-related costs (2)

6,848

2,195

12,799

14,746

Restructuring & realignment (3)

3,559

3,906

17,192

6,611

EPPL impairment (5)

—

—

22,325

—

Brammo (6)

—

—

(13,113

)

—

Intangible amortization (7)

7,763

4,030

16,708

11,933

Other expenses (4)

3,073

—

5,110

—

Adjusted net income (8)

117,926

97,556

306,143

227,686

Diluted EPS

$

1.50

$

1.28

$

3.78

$

2.21

Victory wind down (1)

0.02

0.09

0.02

0.83

Acquisition-related costs (2)

0.11

0.03

0.20

0.23

Restructuring & realignment (3)

0.06

0.06

0.26

0.10

EPPL impairment (5)

—

—

0.34

—

Brammo (6)

—

—

(0.20

)

—

Intangible amortization (7)

0.12

0.06

0.26

0.19

Other expenses (4)

0.05

—

0.08

—

Adjusted EPS (8)

$

1.86

$

1.52

$

4.74

$

3.56

(1) Represents adjustments for the wind down of Victory Motorcycles, including wholegoods, accessories and apparel

(4) Represents adjustments for the impacts of tax reform and non-recurring litigation expenses

(5) Represents adjustments for the impairment of the Company's equity investment in Eicher-Polaris Private Limited (EPPL). This charge is included in Equity in loss of other affiliates (non-operating) on the Consolidated Statements of Income.

(6) Represents a gain on the Company's investment in Brammo, Inc. This gain is included in Other income (non-operating) on the Consolidated Statements of Income.

(8) The Company used its estimated statutory tax rate of 23.8% and 37.1% for the non-GAAP adjustments in 2018 and 2017, respectively, except for the non-deductible items and the tax reform related changes noted in Item 4

NON-GAAP RECONCILIATION OF SEGMENT RESULTS

(In Thousands), (Unaudited)

Three months ended

Nine months ended

September 30,

September 30,

SEGMENT SALES

2018

2017

2018

2017

ORV/Snow segment sales

$

1,035,554

$

1,007,392

$

2,858,959

$

2,577,003

Restructuring & realignment (3)

660

—

2,789

—

Adjusted ORV/Snow segment sales

1,036,214

1,007,392

2,861,748

2,577,003

Motorcycles segment sales

155,316

155,059

458,285

473,345

Victory wind down (1)

1,055

1,560

1,304

507

Adjusted Motorcycles segment sales

156,371

156,619

459,589

473,852

Global Adjacent Markets (GAM) segment sales

96,251

91,575

322,996

280,152

No adjustment

—

—

—

—

Adjusted GAM segment sales

96,251

91,575

322,996

280,152

Aftermarket segment sales

229,973

224,700

676,859

666,928

No adjustment

—

—

—

—

Adjusted Aftermarket sales

229,973

224,700

676,859

666,928

Boats segment sales

134,321

—

134,321

—

No adjustment

—

—

—

—

Adjusted Boats sales

134,321

—

134,321

—

Total sales

1,651,415

1,478,726

4,451,420

3,997,428

Total adjustments

1,715

1,560

4,093

507

Adjusted total sales

$

1,653,130

$

1,480,286

$

4,455,513

$

3,997,935

Three months ended

Nine months ended

September 30,

September 30,

SEGMENT GROSS PROFIT

2018

2017

2018

2017

ORV/Snow segment gross profit

$

290,631

$

296,904

$

831,413

$

776,013

Restructuring & realignment (3)

660

—

2,789

—

Adjusted ORV/Snow segment gross profit

291,291

296,904

834,202

776,013

Motorcycles segment gross profit

19,577

10,354

60,817

11,589

Victory wind down (1)

1,239

7,555

417

54,970

Restructuring & realignment (3)

—

—

1,185

—

Adjusted Motorcycles segment gross profit

20,816

17,909

62,419

66,559

Global Adjacent Markets (GAM) segment gross profit

24,155

15,983

83,520

65,297

Restructuring & realignment (3)

45

6,214

479

10,517

Adjusted GAM segment gross profit

24,200

22,197

83,999

75,814

Aftermarket segment gross profit

66,092

63,239

182,291

164,721

Acquisition-related costs (2)

—

—

—

12,950

Adjusted Aftermarket segment gross profit

66,092

63,239

182,291

177,671

Boats segment gross profit

20,253

—

20,253

—

Acquisition-related costs (2)

3,130

—

3,130

—

Boats segment gross profit

23,383

—

23,383

—

Corporate segment gross profit

(19,438

)

(22,518

)

(68,367

)

(60,781

)

Restructuring & realignment (3)

3,423

—

11,512

—

Adjusted Corporate segment gross profit

(16,015

)

(22,518

)

(56,855

)

(60,781

)

Total gross profit

401,270

363,962

1,109,927

956,839

Total adjustments

8,497

13,769

19,512

78,437

Adjusted total gross profit

$

409,767

$

377,731

$

1,129,439

$

1,035,276

(1) Represents adjustments for the wind down of Victory Motorcycles, including wholegoods, accessories and apparel